The
year 2013 may shape up to become a year of better tidings for the
Philippines following its mixed fortunes last year, when the economy
soared but Mindanao was struck by a typhoon that killed over a thousand
people, affected millions more, sent hundreds of others missing and
caused billions of pesos in damage to agriculture, infrastructure and
property.
Indeed, analysts are predicting a record year for the economy in
2013—particularly for the equities and currency markets—as more
investors bet on the stock market and support the peso in anticipation
of the Philippines’ debt receiving an investment-grade rating.
An investment grade rating means Philippine debt is safe and carries
little risk, hence attracting more investors and, at the same time,
reducing the interest rate that the country must pay for the money it
borrows abroad.
Adult Filipinos are also hopeful for this year as indicated by the
results of a Social Weather Stations survey for the fourth quarter last
year, when 92 percent of them said so.
And the political front is expected to heat up as a result of the
mid-term elections in May and the continuing dispute between the ruling
Liberal Party and the United Nationalist Alliance, which are at
loggerheads as a result of Malacañang’s suspension of Cebu Gov.
Gwendolyn Garcia for alleged abuse of authority.
Garcia has defied her six-month suspension and lived inside her
office at the Provincial Capitol since the order suspending her was
released on Dec. 19 and her replacement was announced. She has asked the
Court of Appeals to step in and stop Malacañang.
Both the peso and the stocks rose on Friday last week, ending trading this year on a positive note.
The peso gained 0.2 percent to close at 41.05 against the dollar last
week and 6.4 percent since the start of the year to become Asia’s best
performing currency after South Korea’s won.
The PSEi, the 30-company benchmark index of the Philippine Stock
Exchange, also climbed, and by 17 points or 0.3 percent to close at
5,812.73 near a record level. The index had jumped by 1,440.77 points or
33 percent since the start of the year.
The PSEi’s 33-percent gain was the second best in Asia, next to
Thailand Stock Exchange’s 36.3-percent increase, according to First
Metro Investments Corp.
Economists and analysts see the peso and the stocks sustaining their
gains in 2013, when the country is expected to receive an
investment-grade credit rating. Overseas funds invested in emerging
markets with robust economic performance such as the Philippines led to
the appreciation of the peso and the stocks.
“The strong surges in inflows have resulted in considerable
appreciation pressures on the peso,” Bangko Sentral Governor Amando
Tetangco Jr. had said.
“In order to help manage volatilities in the exchange rate movements,
the Bangko Sentral maintained its presence in the foreign exchange
market and built up its reserves to a record $84 billion as of November
2012.”
Bangko Sentral Deputy Governor Diwa Guinigundo said the strength of
the peso reflected the Philippines’ strong macroeconomic fundamentals,
including its external payments surplus and the capital inflows attached
to the country’s positive outlook.
“As we expect sustained BoP surplus next year, the peso will remain firm,” Guinigundo said.
“The challenge to some economic sectors is to improve their
efficiency and productivity so they can compete in the external markets.
After all, a firm peso helps reduce production cost.”
\BDO analyst Jonas Ravelas predicted that the peso will fluctuate
from 39 to 43.50 to the dollar in 2013 before settling at 42.10 by the
end of that year.
\Philippine Stock Exchange president Hans Sicat said he was confident
about the stock market’s continuing strong performance as he expected
capital-raising activities in 2013 to match, if not exceed, the more
than P200 billion raised through that market in 2012.
Justino Calaycay, a stockbroker from Accord Capital Equities Inc.,
said the PSEi was expected to rise to a range of 6,800 to 7,000 points,
with a fighting target of 7,500.
“The momentum of 2012 may be expected to carry over to 2013, with
additional impetus from the mid-term polls scheduled in May,” Calaycay
said. “The market will keep tabs on the country’s ratings, pregnant with
anticipation of reaching investment grade, or at the very least hints
of getting there.”
DA Market Securities sees the PSEi hitting 6,750 on the positive economic outlook.
“Optimistically, end 2013, there is a possible target of 6,750 and support at 6,280 to 6,300 level,” the company said.
BDO analyst Jonas Raveles said inflation would continue to be
manageable and interest rates low as the central bank would continue to
protect the market from the volatility caused by the global economic
slowdown.
President Benigno Aquino III said this year would be much better than
last year, and that it would be a critical stage in his
administration’s crusade for continuing progress and good governance.
House Speaker Feliciano Belmonte Jr. vowed there would be a more responsive Congress this year.
“We intend to maximize our chamber’s efforts for the rest of our term
and hope to leave a mark as most responsive Congrees—one that has
heeded the effectively represented the voice of our people from all
sectors of our constituencies,” he said.
“May 2013 be a new beginning for each of us and for our nation.”
Senator Teofisto Guingona III said the 2012 Framework Agreement with
the Moro Islamic Liberation Front would pave the way for greater
progress especially in Mindanao.
“That agreement will stabilize our relationships and our activities,” he said.
“As we support the process towards peace, we must remain vigilant that the products of the process will truly bring peace.”
Senator Loren Legarda welcomed a recent Pulse Asia survey that showed
the Filipinos’ growing awareness of the importance of protecting the
environment and increasing approval of the government’s environmental
programs.
But she said that although meaningful strides had been made to
protect the environment, there was still a need to fully implement the
environmental laws and to improve disaster risk management.
Environment Secretary Ramon Paje urged the Filipinos to learn from
the past in order to avoid a repeat of the destruction triggered by
natural calamities including that inflicted by Typhoon “Pablo” in
Mindanao.
“We’re hoping for a hazard-free, disaster-free 2013,” Paje said.
“We are calling on everybody to be more prepared for stronger
typhoons that induce flash floods and landslides so we can avoid a
repeat of Pablo and other destructive typhoons.”
Pablo, the most powerful typhoon to hit the country in 2012, slammed
into Mindanao on Dec. 4, killing 1,050 people, injuring over 2,000 and
sending 800 missing.
Pablo affected a total of 6.2 million people. Of the 168,227 homes
that Pablo damaged, over 65,500 were totally destroyed and the estimated
value of the property damage was $839 million.
Close to 12,000 people are still in 43 evacuation centers.
“The devastation was total,” Disaster Council head Benito Ramos said. With Jenniffer B. Austria, Maricel V. Cruz, Macon Ramos-Araneta and Othel V. Campos
